Credit downgrade 'just around the corner,' warns Opposition

New Brunswickers could soon be paying higher interest rates on the growing public debt, warn Opposition politicians after a credit rating agency said the province's budget outlook has turned negative.

Blaine Higgs, the former Progressive Conservative finance minister, now an Opposition MLA, delivered the official response to Tuesday's Liberal budget, which projected a deficit of $476.8 million that would push the total net debt to $12.6 billion by March 31, 2016.

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Higgs zeroed in on a Thursday report from Moody's credit rating agency that called New Brunswick's financial direction "credit negative."

"One can only assume that a credit rating downgrade is just around the corner," said Higgs.

A downgrade would mean the province would pay higher interest rates to borrow money, further compounding its difficulties in balancing the budget.

Moody's is reacting to Tuesday's budget and its plan for more infrastructure spending and a higher deficit, Higgs says.

But cabinet minister Donald Arsenault says Moody's will soon receive a briefing on the Liberal strategic review, which will likely lead to big spending cuts next year.

"You know, once they're aware of this exercise, how serious we are about this exercise, for not only this budget but next budget, I'll let the minister of finance have those conversations with the bond rating agencies."

For now, Moody's says New Brunswick's spending is increasing at 2.5 times its growth in revenue an unsustainable trend.